Stipulation Between Divorcing Spouses Included All Interest in Property, Not Mere Possession

Even though the wife took possession of the property, the trial court held that the stipulation did not affect the classification of the property.

Tennessee case summary on classification of inherited real property in divorce.

Karen Elizabeth Phillips Lowe v. Robert Melvin Lowe

The husband and wife in this Unicoi County, Tennessee, case were married in 1993.  It was the wife’s third marriage and the husband’s second.  They had no children, and in 2022, they separated.  The wife filed for divorce later that year.  They stipulated that “each would keep” certain inherited interests in real property, in two different parcels.

In early 2023, the trial court, Judge Suzanne Cook, entered its order.  That order held that the husband had inherited property worth one million dollars, as well as trust fund assets of $10,000, and that this was the husband’s separate property.  But the wife’s property was found to be marital property.  The wife was awarded possession, but the husband was awarded 40% of the value.  A number of other issues were also decided, and he wife brought an appeal to the Tennessee Court of Appeals.  She argued that the trial court had erred in its interpretation of the stipulation regarding inherited real property.

The appeals court first noted that stipulations are generally binding, in the absence of fraud or mistake.  They are also regarded as contracts and enforceable under contract law principles.

The trial court had held that the parties would receive possession of the specified properties.  But even though the wife took possession of the property, the trial court held that the stipulation did not affect the classification of the property. 

But the appeals court held that this was an improper interpretation.  From the language employed by the attorneys at the hearing, it was clear that the intention was to award all interest in the property to the respective spouses, and not mere possession.  For this reason, the Court of Appeals reversed this portion of the lower court’s ruling.

It went on to hold that because of this change, the entire property division would need to be revisited, and remanded the case for that reason.  It also held that costs might be revisited on remand.

The husband did prevail on another issue.  The lower court had declined to extend a protective order against the husband, but the appeals court affirmed.

No. E2023-00338-COA-R3-CV (Tenn. Ct. App. Dec. 14, 2023).

See original opinion for exact language.  Legal citations omitted.

To learn more, see Property Division in Tennessee Divorce and view our video Is Tennessee a 50 50 divorce state?